Any Tax Credits experts?

hm2be

I get WTC and CTC . I returned to work at the end of the last tax year so my last years earning was estimated on just a few months salary iyswim. I like to have everything in order so I informed Tax Credits straight away what my actual income for this year will be.

My payments are being based on last years income which is a lot lower than my actual income. I'm assuming that means that I will be overpaid this year and that next year they may cut them off completely to compensate. Is it possible to get them to base it on my current years income. I do not want be overpaid.

Hapless_2

yup, just phone them and give them your new amount.

pamaris

Just read a ton about this, and I even called the helpline to ask... I was told that tax credits are based on previous years income... so next year's credits (if any are due) will be based on this year's income.

CIS

If this years income is no more than £25K higher than last years then this tax years tax credits will be based on the income you earned last year.

hm2be

Just spoke to a lady on the TC helpline. She said that I would not be overpaid or have reduced payments next year. Next years income would be based on this years income. I'm so confused.

I was under the impression that Tax Credits used your last years earnings to assume what this years earnings would be. Then if you earn more than the assumed income then overpayments occur. Is this not correct?

Hapless_2

I always phone them and let them know as soon as anything changes.

jay1jay

Your payments for 2007-08 are initially based on your income for 2006-07. But at the end of the year your claim for 2007-08 will be recalculated based on your income for 2007-08. If you want to avoid an overpayment you must supply an estimate of your income for this year if it is going to be higher than last year. THe limit of how high your income can get before you have to tell tax credits is shown on your award notice.

If you want to give an estimate to the Helpline for this years income they have to take it. If they refuse, kick off and ask for a team leader. If you end up with an overpayment because your income went up you will never get it written off, even if you've told the helpline 100 times that your income has increased. they say you should know your payments are wrong because you know what income they are based on.

And even if you do tell them about your income change & they tell you they have put it on your records - make sure you get a new award notice showing the amended income figure. there are so many computer errors that even when the right info is put into the computer, it can choose to ignore it.